For example, he borrowed $25K, paid me $3K in "interest", now I foreclose, have my purchase basis as $22K now, and am adding the costs of rehab and the foreclosure itself as part of the depreciable basis on top of that $22K, then will have my total basis here soon right before I put the house in service.

Two of the safe harbors that can help you deduct improvements are below:1) 2500 de minimis safe harbor.the safe harbor applies to amounts paid during the tax year to acquire or produce what the regs call a “unit of property” (UOP), you must meet these requirements: (1)you need to have written accounting procedures treating as an expense for non-tax purposes amounts paid for property costing less than a specified dollar amount (which will be 2500 for you), or with an economic useful life of 12 months or less;.(2) the taxpayer treats the amount paid for the property as an expense on its books and records in accordance with its accounting procedures. ( do this on your bookkeeping software or whatever you utilize)(3) the amount paid for the UOP doesn't exceed $2,500. as substantiated by the invoiceNote: The cost for the Unit of Property includes l additional costs (for example, delivery fees, installation services, or similar costs) if these additional costs are included on the same invoice with the property.2) Small taxpayer safe harbor: To be eligible for the safe harbor, the total amount of improvements for the property for the tax year may not exceed the lesser of $10,000 or2% of the property's unadjusted basis.If the total amount paid exceeds the safe harbor threshold, the safe harbor does not apply to any amounts spent during the tax year.

How much did you end up paying in total closing costs and did you use a 3rd party loan service?

It'l need a total roof replacement.

This way, rather than the group of 3 being capped at 10 total, you can get to 30 total.

Rod Govea They show the outstanding principal amount but that is not the total payoff.

s example of a house worth $100K with a $60K outstanding balance, the total owed is probably closer to $75K with all the fees and foreclosure costs. 

Right now I gross around 90,000 a year income at my job plus the rental and the only debt I have is a truck paymet 540 per month (36k total loan).

Then you had a 25% return on your total $200k cost which is pretty reasonable depending on how long the entire project ran.

After paying the cost seg guy, the CPAs and the tax attorney I can tell you (I'm in CA, your mileage will vary on that and everything else), on a 4.4MM purchase I would have taken a 594k total depreciation loss in 2017 due to the new bonus rules.Matt